Macy’s is delaying third-quarter 2024 earnings after an employee concealed $154 million in delivery costs

Macy’s has announced a delay in its third-quarter 2024 financial results due to an accounting issue involving an employee who allegedly concealed up to $154 million in delivery costs.

The retailer released preliminary sales figures that suggested a 2.4% decline in net sales to $4.74 billion.

The company disclosed that a single employee “intentionally” made false accounting entries to hide delivery costs estimated at $132 million to $154 million between the fourth quarter of 2021 and the third quarter of 2024.

During this period, Macy’s recorded delivery costs of approximately $4.36 billion.

Macy’s said the employee in question is no longer associated with the company.

Originally scheduled to report results on November 26, Macy’s now expects to report its full third quarter financial results by December 11, 2024.

An independent investigation found no evidence of involvement by other employees and no indication that the problem affected cash management or supplier payments, the company said.

Commenting on the mistakes at Macy’s, Stefan van Duyvendijk of US accounting software company FloQast said: “ERPs (enterprise resource planning) and most reporting programs are not designed to detect incorrect accounting, let alone intentionally fraudulent accounting.”

“While they have some important controls in place, these are limited, which is why account teams spend so much time on the month-end close process to identify and correct these errors. This could have been avoided with proper vetting and controls. Both are traditionally difficult to achieve.

“However, by combining workflow automation with compliance software, this error would have been difficult to miss. Automating workflows would have made it much easier to set up and execute the appropriate audit procedures, with easy insights available to auditors.”

“Macy’s delays third-quarter 2024 earnings after employee conceals $154 million in delivery costs” was originally created and published by International Accounting Bulletin, a brand owned by GlobalData.

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